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Despite a side that has taken$ 500 billion from its market cap, the average Nvidia ( ) analyst’s price target, among 63 who cover it, is$ 174, about 45 % above where the stock trades today. Wall St. has not given up on the catalysts of the huge march that has increased the price by 900 % in five years.
The grounds for the enthusiasm are a little convoluted. China’s new DeepSeek AI software cost about$ 7 million to develop, compared to$$ 100 million for an OpenAI product of the same caliber. However, it appears that the Chinese may have made false claims. DeepSeek’s authors could had gotten a large number of Nvidia’s most prominent chips from Singapore. Donald Trump’s candidate for Commerce Secretary, Howard Lutnik, commented” They bought a huge number of Nvidia cards, found a way to get around the regulations, and now they are using them in their” DeepSeek AI design. ” If so, Nvidia’s powerful chip franchise may be protected.
Another argument is that the tens of billions of dollars pumped in AI server farms by tech companies which include OpenAI, Microsoft ( ), Meta Platforms ( ), and a group put together by the White House made the right decision. However, this idea may become hard to prove. Nvidia said that DeepSeek’s progress may mean that the AI world’s growth is exploding, and that the need for its cards will continue to wave as well. If that is not correct, the nation’s largest tech firms and” smartest “financiers have made horrible missteps.
When Nvidia releases its profitability and forward guidance, Nvidia does provide evidence that which theory is true. The next quarter’s consensus revenue estimate is$ 38.3 billion, up 73 % from the same quarter last year. DeepSeek may not be able to change this number, but any indication that the year’s revenue will be” sweet” will cause the stock to take a nosedive.
Most Nvidia researchers are going to either seem like magicians, or fools.
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